Updated DOL Legislation

On September 24, 2019, the U.S. Department of Labor (DOL) announced a final rule to make 1.3M workers eligible for overtime pay. The legislation updates the earnings thresholds necessary for exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and
overtime pay requirements. Unless exempt, employees covered by the FLSA must receive pay for hours worked over 40 in a workweek at a rate not less than one and one-half their regular rate of pay. The DOL intends to update the standard salary and total annual compensation levels more regularly in the future.

 

HIGHLIGHTS THE FINAL RULE: EFFECTIVE JANUARY 1, 2020

  • The “standard salary level” raises from $455 to $684/week (equal to $35,568/year for a full-year worker)
  • The total annual compensation level increases for “highly compensated employees (HCEs)” from $100,000 to $107,432 annually
  • Employers can use non-discretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level
  • Revises the special salary levels for workers in U.S. territories and in the motion picture industry

 

TO QUALIFY FOR AN EXEMPTION TO THIS RULE, AN EMPLOYEE MUST BE

  • Paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed
  • Paid at least a specified weekly salary level of $684 (equal to $35,568/year for a full-year worker)
  • Primarily perform executive, administrative, or professional duties
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